The Future of Consumerist

Over the last twelve years, Consumerist has been a steadfast proponent and voice on behalf of consumers, from exposing shady practices by secretive cable companies to pushing for action against dodgy payday lenders. Now, we’re joining forces with Consumer Reports, our parent organization, to cultivate the next generation of consumer advocacy.

Stay tuned as Consumerist’s current and future content finds its home as a part of the Consumer Reports brand. In the meantime, you can access existing Consumerist content below, and we encourage you to visit Consumer Reports to read the latest consumer news.

* Computer Scoring – I listed this one first because it’s the most interesting of the four reasons. Tax returns are “scored” using two systems – Discriminant Function System (DIF) and Unreported Income DIF (UIDIF). The Discriminant Information Function System (DIF) score gives the IRS an indication of the potential for change in tax due, based on past IRS experience. The Unreported Income DIF (UIDIF), as you can imagine, scores the return on the potential for unreported income. The higher the score, for either, the more likely the return will be reviewed.

* Information Matching – This is an obvious reason because it’s the easiest to catch. The IRS receives the same W-2s and 1099s that you do, so it’s trivial for them to compare the two totals. If they don’t match, they investigate.

* Related Examinations – Beware who your friends/business contacts are! If their returns are audited and their return includes transactions with you, your return may be audited as well.

* Potential participants in abusive tax avoidance transactions – The IRS may get information about promoters of and participants in various schemes and select a return for audit based on that information.